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I spoke with a pharmacist friend the other day. He's saying that it's a tough gig out there for an independent pharmacy. The margin on drugs are quite thin, and margin on retail are razorthin. They are screwed on payment terms and there are going to be PBS changes that will on average reduce income by $90k per store.

He also mentioned that it's a mis-conception that Australians pay more on drugs... he said while that is true for some common drugs, the truely expensive drugs (the ones that cost over 5 figues) are made very affordable by PBS. So in value-weighted terms drugs are not overly expensive.

The other thing he mentioned was that, with these super-expensive drugs, the pharmacy puts up the money to buy it first, and it's 10 days before the government's payment come in. The out-of-pocket payment by the patient is only low, so really it just locks up working capital with very little in return.

(Sorry I can't be more clear as it was a conversational conversation so I am struggling to recall full details).

<blockquote data-quote="skc" data-source="post: 793370" data-attributes="member: 19894">I spoke with a pharmacist friend the other day. He&#039;s saying that it&#039;s a tough gig out there for an independent pharmacy. The margin on drugs are quite thin, and margin on retail are razorthin. They are screwed on payment terms and there are going to be PBS changes that will on average reduce income by $90k per store.He also mentioned that it&#039;s a mis-conception that Australians pay more on drugs... he said while that is true for some common drugs, the truely expensive drugs (the ones that cost over 5 figues) are made very affordable by PBS. So in value-weighted terms drugs are not overly expensive. The other thing he mentioned was that, with these super-expensive drugs, the pharmacy puts up the money to buy it first, and it&#039;s 10 days before the government&#039;s payment come in. The out-of-pocket payment by the patient is only low, so really it just locks up working capital with very little in return. (Sorry I can&#039;t be more clear as it was a conversational conversation so I am struggling to recall full details).</blockquote>

[QUOTE="skc, post: 793370, member: 19894"] I spoke with a pharmacist friend the other day. He's saying that it's a tough gig out there for an independent pharmacy. The margin on drugs are quite thin, and margin on retail are razorthin. They are screwed on payment terms and there are going to be PBS changes that will on average reduce income by $90k per store. He also mentioned that it's a mis-conception that Australians pay more on drugs... he said while that is true for some common drugs, the truely expensive drugs (the ones that cost over 5 figues) are made very affordable by PBS. So in value-weighted terms drugs are not overly expensive. The other thing he mentioned was that, with these super-expensive drugs, the pharmacy puts up the money to buy it first, and it's 10 days before the government's payment come in. The out-of-pocket payment by the patient is only low, so really it just locks up working capital with very little in return. (Sorry I can't be more clear as it was a conversational conversation so I am struggling to recall full details). [/QUOTE]

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